Digital Billboard Lawsuit

Scenic Nevada sued the city of Reno in 2012 following the city council vote to approve digital billboards, despite a vote of the people in 2000 that prohibits new billboard construction and new permits. We asked the court to void the ordinance because it violated the voters’ rights and state and federal law.

Why We Sued

We said when it comes to billboards the city keeps moving in the wrong direction, moving farther away from the people’s vote.

Our collective reaction was we had no choice.

Scenic Nevada was the author of R-1, the 2000 ballot initiative in which over 32,700 people voted to ban new billboard construction and permits. In a nutshell, we were trying to preserve the people’s vote from further degradation as well as stop further intrusion of billboard advertising on our public roads.

When it comes to billboards, the city council, from 2000 to 2012 had a different agenda than the people. Within a month of the people’s vote, the city granted 12 new permits to a billboard company in a lawsuit settlement, despite the ban on new permits.

The ballot initiative approved by the voters said, “The construction of new off-premises advertising displays/billboards is prohibited, and the City of Reno may not issue permits for their construction. (Approved by the voters at the November 7, 2000, General Election, Question R_1 – The results were certified by the city council on November 14, 2000).”

Once the ballot initiative passed, the city council had no choice but to add the billboard ban to city code. During those hearings, which took 14 months, the city council agreed with the billboard industry that the new law didn’t prohibit new billboards after all; it just prohibited “additional” billboards.

The city council decided in 2002, over the objections of Scenic Nevada, that billboards would be capped at the number in existence in 2000, when the ballot initiative passed. The city council also added two exceptions to the cap; billboards acquired through annexations and permits granted to billboard companies in lawsuit settlements.

And this is how the city council got around the people’s vote. A billboard could be taken down in one spot and its owner could get a new permit to construct a new billboard in another allowed location. If there was no new location available when the billboard came down, the owner would get credit or “banked receipt” for use later.

According to the city, even though it is a new billboard, it isn’t an “additional” billboard. The billboard cap wasn’t exceeded. It was known as the banking and relocation scheme and for the entire decade after the people’s vote, the city routinely handed out new permits for new construction in this way.

Because of lawsuit settlements and annexations, the cap kept going up. There were 278 permits in 2000 and the city testified in February, 2014 that there were now 294 permits allowed within the city limits. Of those, 93 are banked receipts, leaving 201 existing billboards.

The tipping point came in 2008 when the city council agreed to consider adding digital billboards. For the next four years, Scenic Nevada was present at every workshop and public hearing with studies, letters, and a voter survey all opposing digital billboards. We consistently brought up the people’s vote of 2000.

We said when it comes to billboards the city keeps moving in the wrong direction, moving farther away from the people’s vote. Perpetuating billboards with “relocation” eliminated the long-term benefit; gradual attrition. Digitals would further erode the people’s vote and are even more obnoxious, intrusive and distracting than traditional signs. All of our arguments were ignored.

The digital billboard ordinance was passed on October 24, 2012 and we filed our lawsuit on November 16. The bench trial was held February 24, 2014 and the court upheld the city’s ordinance. We filed our appeal March 28, 2014 to the Nevada Supreme Court the day after the district court’s ruling was released.

These electronic signs in Reno would have flipped every eight seconds with a different ad, night and day. But, while the appeal was pending, the city council adopted a moratorium prohibiting staff from accepting digital billboard permit applications.

With good reason. In the event a digital was erected, and the Nevada Supreme Court agreed with Scenic Nevada, the city would have to pay millions of taxpayer dollars to have it removed. Nevada state law requires payment for the removed board and the lost advertising revenue. The taxpayers in Minnesota in 2013 paid $4.3 million to industry giant Clear Channel Outdoor for one digital billboard, removed from a bridge during a road improvement project.

The Nevada Constitution says a ballot initiatives can’t be amended, annulled, repealed or set aside until three years after the vote. The city council set it aside one month after the vote when it handed out 12 permits in a lawsuit settlement. They amended it 14 months after the vote when they approved the ordinance allowing billboard “relocations.” All the while the city protested that it was upholding the vote by enforcing a billboard cap; a cap that keeps moving north.

We asked the Nevada Supreme Court to decide if the people’s vote meant something. If it did, the digital billboard ordinance should be voided. It was based on the unconstitutional ordinances passed in 2002 allowing new construction less than three years after the people’s vote. It relies on taking some down to put new ones back up, which calls for new billboard permits and, obviously, new construction.

The digital ordinance requires billboard owners to take down some existing billboards and surrender the permits to get a digital permit. Another reason, the city says, it was upholding the ballot initiative. Multiple traditional boards would be exchanged for one digital, reducing their numbers.

But there are plenty of exceptions. Billboard owners can also surrender “banked” permits, the credits they received by the city for billboards taken down for one reason or another and are waiting for a new permitted location. The most stringent part requires a takedown of four billboards. But that’s only within the ten areas where billboards have been allowed to cluster over the years. And billboard owners can surrender eight banked permits, instead of taking any existing billboards down. In the rest of the city, the requirement is reduced to two billboards or two banked receipts.

Would the digital billboard ordinance reduce billboard clutter? We knew it wouldn’t. Owners may surrender a few boards from the less traveled roads citywide to get a digital along the highway. But, most likely, owners would turn in the unused permits to get a digital billboard instead of taking a traditional billboard down. Clutter would remain and digitals would be added to the mix, spoiling the views from our public roads with flashing rotating ads during the day and perhaps shining into people’s homes at night.

Digitals are far more expensive than traditional. They cost between $250,000 and $500,000 apiece. But they reap much higher profits than traditional billboards because owners collect revenues from eight ads flipping every eight seconds as opposed to one stationary ad.

The Supreme Court held oral arguments on November 3, 2015 and issued its unanimous opinion June 30, 2016. The justices upheld the digital ordinance but in a stunning declaration said that the banking and relocation ordinances had violated the state constitution and were void. It was the first time anyone said that Scenic Nevada was right. The people had enacted a billboard ban that was amended by the city council actions and that was unconstitutional.

However, there was a twist. The justices said that when the city adopted the digital billboard ordinance it re-enacted the relocation ordinances long after the three year limit, therefore all of the ordinances were now valid.

That didn’t matter to us because now we knew we were right. The people’s billboard ban had never been enacted. And we were able to convince the city council in 2017 that it was up to them to right a wrong committed 17 years ago.

After an incredible effort which included many meetings, a voter survey, a citizen petition, a letter writing campaign and even a second lawsuit, the Reno City Council voted unanimously to enact the people’s vote. A new ordinance was drafted and approved on September 15, 2017. It ended the practice of banking and relocation and it prohibits new billboards, digital billboards and new permits.

History of the struggle against billboards in Reno

January 20, 2000 – Following repeated attempts by Reno citizens to persuade the Reno Planning Commission and City Council to enact stronger billboard controls, a grassroots, volunteer organization called “Citizens for a Scenic Reno” (later renamed Scenic Nevada) was formed.

March 29, 2000 – CFASR filed an Initiative Petition, R-1, with the Reno City Clerk which if passed would prohibit the city from allowing new billboard permits and new billboard construction.

November 7, 2000 – At the polls, of the 57,782 votes cast, 32,765, or 57%, voted in favor of Ballot Question R-1, which read: “The construction of new off-premises advertising displays/billboards is prohibited, and the City of Reno may not issue permits for their construction.”

December 2000 – Less than one month after the ballot initiative become law, the city council granted 11 new billboard permits to a billboard company to settle a lawsuit brought against the city.

January 22, 2002 – a majority of the City Council voted to amend the municipal code to create a billboard “banking” and relocation system, allowing a billboard company to remove a billboard in one location and “bank” the permit for up to 10 years (later increased to 15 years) until a new permitted location could be found. The new law effectively repealed the ballot initiative barely 14 months after it was approved by the voters.

February 13, 2008 – a majority of the Reno City Council, led by Councilman Dwight Dortch, voted to direct Reno City staff to initiate a text amendment to allow the construction and permitting of new digital billboards. City officials, including the city attorney’s office, reasoned that the ballot initiative allowed relocations and now could also allow “upgrades” to digital billboards.

April 25, 2008 to January 4, 2012 – The Reno Planning Commission and city staff held workshops and public hearings until a final draft of code was recommended in a 4-2 vote for approval to the city council, permitting digital billboards in Reno. Scenic Nevada was present, objecting to the proposed code, during the four years of meetings and appealed the commission’s decision four days after the vote January 4, 2012.

July 27, 2012 – Scenic Nevada releases results from a survey that shows 55% of the Reno registered voters surveyed do not want the city council to allow digital billboards. Further 80% believed there were enough or too many billboards in Reno and 60% did not want to view a digital billboard from their home or office window.

Feb 8, 2012 to Oct. 24, 2012 – The Reno City Council postponed Scenic Nevada’s appeal and held two more workshops, followed by staff meetings with the industry and Scenic Nevada. The industry-driven draft was finally approved after several delays at the Oct. 24, 2012 city council meeting. The council approved digital billboards but delayed the effective date until January 24, 2013, fearing the possibility of lawsuits.

Nov. 16, 2012 – Scenic Nevada files a lawsuit asking the court to void the new law. Scenic Nevada’s objections to the digital billboard ordinance were long-standing and consistent. We testified over and over again that allowing digital billboards within the Reno city limits was a violation of the voter initiative. Throughout the previous four years we accumulated and submitted thousands of pages of documents, including reports, emails, photographs, videos, scientific studies, power point presentations, related court cases, a petition and voter survey results; all opposing digital billboards.

December 12, 2012 – The Reno City Council passes a moratorium on digital billboards until all lawsuits and appeals concerning the digital billboard ordinance are resolved – with good reason. If Scenic Nevada wins and in the event digital billboards are approved and built, it could cost millions to have even one billboard taken down.

February 24, 2014 – A one-day bench trial was held in Second Judicial District Court before Judge Patrick Flanagan.

March 28, 2014 – Judge Flanagan releases his order that rules for the city and upholds the digital billboard ordinance.

November 3, 2015 – The state Supreme Court held oral arguments en banc; meaning all seven justices, not just a three-member panel hear the arguments.

June 30, 2016 – The Supreme court ruling issues its opinion. The justices uphold the digital billboard ordinance. But in a stunning declaration; the court said the city had amended the ballot initiative in violation of the state constitution, which temporarily voided the banking and relocation ordinances, casting doubt on the validity of all billboards erected and permits handed out between 2002 and 2012.

June through December 2016 – Scenic Nevada launches an intense lobbying campaign to convince the Reno City Council to enforce the vote enacted by the people in 2000. Finally, the council unanimously agreed and called for a new moratorium until the billboard law could be rewritten to eliminate banking and relocation and the construction and permits for new billboards, including digital billboards.

February 14, 2017 – City Council votes on the moratorium, which barely passes in a 4-2 vote. Three council members switch their previous vote to enact the billboard ban and want to reconsider adding digital billboards, which would be new construction requiring new permits.

February 21, 2017 – The city council couldn’t agree on what to do about unused permits granted between 2002 and 2012, either. Scenic Nevada said they were void and the city attorney disagreed. We filed a second lawsuit asking the court to decide.

April 2017 – Scenic Nevada commissioned a new survey of Reno voters and publicized the results. 78% agreed the city should enforce the ban; 83% were concerned about traffic safety; 74% were concerned about decreasing property values; 80% didn’t want to view a billboard from their home or office window; and 70% agreed that digital billboards make Reno less attractive.

June 2017 – Three council members switched their position again and the Reno City Council voted unanimously to request a rewrite of the billboard ordinances to prohibit all new billboard construction, including digital billboards, plus end banking and relocation. The council agrees to wait for the court’s decision on the unused permits.

July 24, 2017 – Oral Arguments before Judge Scott Freeman are held in Second Judicial District Court on whether the unused billboard permits are valid.

August 2, 2017 – Judge Freeman grants Scenic Nevada’s request and voids the unused permits and orders the city to cease and desist from allowing new billboard construction using the voided permits.

August 29, 2017 – The city of Reno joins with the billboard company, Lamar Outdoor, to appeal Judge Freeman’s decision voiding the unused billboard permits to the Nevada Supreme Court.

Sept 15, 2017 – the new billboard ordinance was adopted and became law. It prohibits all new billboard construction, except for the unused billboard permits. Digital billboards are also prohibited and Lamar immediately sued the city to get it overturned.

October 2017 – Nevada Supreme Court ordered settlement discussions.

November 15, 2017 – Settlement agreement is reached between the city, Lamar and Scenic Nevada to end all litigation, preserving the new billboard ban, in exchange for re-validating the unused permits voided by Judge Freeman. The city council unanimously approves the agreement one day after the 17th anniversary of the people’s vote in 2000 to prohibit the construction of all new billboards.